AIM ImmunoTech Inc 10-Q/A for FY2020 Q1

AIM ImmunoTech Inc. (AIM)

10-Q/A 2020-05-14 For: 2020-03-31

Added on April 10, 2026

About this 10-Q/A

AIM ImmunoTech Inc filed this 10-Q/A on May 14, 2020, covering the quarter ended March 31, 2020 (FY2020 Q1).

Headline figures

Quarter ended March 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $45K
Net loss: $3.81M; compared with a net loss of $3.37M a year earlier

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Delaware		52-0845822
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

[ ] Large accelerated filer	[ ] Accelerated filer
[X] Non-accelerated filer	[X] Smaller reporting company
	[ ] Emerging growth company

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.001 per share		AIM		NYSE American

	March 31, 2020			December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	27,590		$	1,470
Marketable securities, short term		499			7,308
Funds receivable from sale of New Jersey net operating loss		776			776
Accounts receivable, net		46			44
Prepaid expenses and other current assets		799			848
Total current assets		29,710			10,446
Property and equipment, net		6,950			7,116
Right of use assets, net		141			152
Patent and trademark rights, net		1,240			1,151
Marketable securities, long term		3,012			—
Other assets		1,354			1,354
Total assets	$	42,407		$	20,219

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	165		$	472
Accrued expenses		286			403
Current portion of operating lease liabilities		35			38
Current portion of financing obligation		217			214
Total current liabilities		703			1,127

Long-term liabilities:
Operating lease obligation		106			114
Notes payable, net		4,198			3,910
Financing obligation arising from sale leaseback transaction (Note 14)		2,050			2,104
Redeemable warrants		239			57
Commitments and contingencies

Stockholders’ equity:
Preferred stock, par value $0.01 per share, authorized 5,000,000		—			—
Series B Convertible Preferred Stock, stated value $1,000 per share, 8,000 shares designated, 769 and 778 shares issues and outstanding, respectively		769			778
Common stock, par value $0.001 per share, authorized 350,000,000 shares; issued and outstanding 28,050,512 and 10,386,754, respectively		28			10
Additional paid-in capital		366,235			340,228
Accumulated other comprehensive income (loss)		(4	)		—
Accumulated deficit		(331,917	)		(328,109	)
Total stockholders’ equity		35,111			12,907
Total liabilities and stockholders’ equity	$	42,407		$	20,219

	Three months ended March 31,
	2020			2019
Revenues:
Clinical treatment programs -United States	$	43		$	—
Clinical treatment programs - Europe		2			—

Total revenues		45			—

Costs and expenses:
Production costs		204			231
Research and development		898			928
General and administrative		2,268			1,767

Total costs and expenses		3,370			2,926

Operating loss		(3,325	)		(2,926	)

Interest and other income		21			12
Interest expense and other finance costs		(322	)		(246	)
Debt discount associated with extinguished debt		—			(250	)
Fair value of convertible note adjustment		—			90
Redeemable warrants valuation adjustment		(182	)		(45	)

Net loss		(3,808	)		(3,365	)

Other comprehensive (loss) income:
Unrealized loss on marketable securities		(4	)		—
Net comprehensive loss	$	(3,812	)	$	(3,365	)

Basic and diluted loss per share	$	(0.22	)	$	(2.91	)

Weighted average shares outstanding, basic and diluted		17,490,322			1,156,895

	Series B Preferred			Common Stock Shares		Common Stock $0.001 Par Value		Additional Paid-in Capital		Accumulated other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
Balance December 31, 2019	$	778			10,386,754	$	10	$	340,228	$	—		$	(328,109	)	$	12,907
Shares issued for:
Common stock issuances		—			17,628,996		18		25,755		—			—			25,773
Warrant modification		—			—		—		46		—			—			46
Equity-based compensation		—			—		—		196		—			—			196
Shares issues to pay account payable		—			4,762		—		10		—			—			10
Series B preferred shares converted to common shares		(9	)		—		—		—		—			—			(9	)
Net comprehensive loss		—			—		—		—		(4	)		(3,808	)		(3,812	)
Balance March 31, 2020	$	769			28,020,512	$	28	$	366,235	$	(4	)	$	(331,917	)	$	35,111

	Series B Preferred			Common Stock Shares		Common Stock .001 Par Value		Additional Paid-in Capital			Accumulated other Comprehensive Income (Loss)		Accumulated Deficit			Total Stockholders’ Equity
Balance December 31, 2018	$	—			1,107,607	$	1	$	323,749		$	—	$	(318,576	)	$	5,174
Shares issued for:
Common stock issuance, net of costs		—			321,946		—		2,214			—		—			2,214
Equity-based compensation		—			—		—		175			—		—			175
Redeemable warrants		—			—		—		(2,787	)		—		—			(2,787	)
Series B preferred shares issued, net of offering costs		5,312			—		—		—			—		—			5,312
Series B preferred shares converted to common shares		(2,793	)		—		—		—			—		—			(2,793	)
Net comprehensive loss		—			—		—		—			—		(3,365	)		(3,365	)
Balance March 31, 2019	$	2,519			1,429,553	$	1	$	323,351		$	—	$	(321,941	)	$	3,930

	2020			2019
Cash flows from operating activities:
Net loss	$	(3,808	)	$	(3,365	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment		173			194
Redeemable warrants valuation adjustment		182			45
Fair value of convertible note adjustment		—			(90	)
Change in convertible debt – refinancing		—			20
Extinguishment of convertible note		—			344
Warrant modification		46			—
Amortization of patent, trademark rights		208			17
Changes in ROU assets		11			11
Equity-based compensation		196			175
Realized (loss) gain on sale of marketable securities		(4	)		—
Amortization of finance and debt issuance costs		181			35
Change in assets and liabilities:
Accounts and other receivables		(2	)		993
Prepaid expenses and other current assets		49			7
Lease liability		(11	)		(8	)
Accounts payable		(307	)		87
Accrued interest expense		143			—
Accrued expenses		(117	)		78
Net cash used in operating activities		(3,060	)		(1,457	)
Cash flows from investing activities:
Proceeds from sale of marketable securities		14,116			—
Purchase of marketable securities		(10,319	)		(960	)
Purchase of property and equipment		(7	)		(14	)
Purchase of patent and trademark rights		(297	)		(124	)
Net cash provided by (used in) investing activities		3,493			(1,098	)
Cash flows from financing activities:
Financing obligation payments		(86	)		(84	)
Proceeds from sale of stock, net of issuance costs		25,773			4,734
Net cash provided by financing activities		25,687			4,650
Net increase in cash and cash equivalents		26,120			2,095
Cash and cash equivalents at beginning of period		1,470			299
Cash and cash equivalents at end of period	$	27,590		$	2,394
Supplemental disclosures of non-cash investing and financing cash flow information:
Unrealized loss on marketable securities	$	4		$	—
Stock issued to settle accounts payable	$	10		$	—
Operating Lease – Right of Use Assets	$	—		$	148

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding January 1, 2020		127,747		$	29.61		6.41	$	—
Granted		—			—		—		—
Forfeited		(1,892	)		20.45		—		—
Expired		—			—		—		—
Outstanding March 31, 2020		125,855			29.75		6.25	$	—
Vested and expected to vest March 31, 2020		125,855			29.75		6.25	$	—
Exercisable March 31, 2020		65,441			13.97		7.49	$	—

Securities	Amortized Cost		Gross Unrealized Gains /(Losses)		Gross Unrealized Gains /(Losses)			Fair Value		Marketable Securities
U.S. Treasury notes		2,296		—		(2	)		2,294		2,294
U.S. Government mortgage backed securities		1,197		—		(2	)		1,195		1,195
Totals	$	3,493	$	—	$	(4	)	$	3,489	$	3,489

	Less than 12 Months				12 Months or More					Total
Securities	Fair Value		Gross Unrealized Gains		Fair Value		Gross Unrealized Gains			Fair Value		Gross Unrealized Gains
U.S. Treasury notes		477		—		1,817		(2	)		2,294		(2	)
U.S. Government mortgage backed securities		—		—		1,195		(2	)		1,195		(2	)
Totals	$	477	$	—	$	3,012	$	(4	)	$	3,489	$	(4	)

	(in thousands)
	March 31, 2020		December 31, 2019
Compensation	$	17	$	94
Professional fees		45		73
Clinical trial expenses		—		56
Other expenses		224		180
	$	286	$	403

	March 31, 2020			December 31, 2019
Underlying price per share	$	2.56		$	0.54
Exercise price per share	$	82.50		$	82.50
Risk-free interest rate		0.20	%		1.58	%
Expected holding period		1.42			1.67
Expected volatility		130	%		96	%
Expected dividend yield		-			-

(i)	Risk-Free Interest Rate. The risk-free interest rates for the Warrants are based on U.S. Treasury constant maturities for periods commensurate with the remaining expected holding periods of the warrants.
(ii)	Expected Holding Period. The expected holding period represents the period of time that the Warrants are expected to be outstanding until they are exercised. The Company utilizes the remaining contractual term of the Warrants at each valuation date as the expected holding period.
(iii)	Expected Volatility. Expected stock volatility is based on daily observations of the Company’s historical stock values for a period commensurate with the remaining expected holding period on the last day of the period for which the computation is made.
(iv)	Expected Dividend Yield. Expected dividend yield is based on the Company’s anticipated dividend payments over the remaining expected holding period. As the Company has never issued dividends, the expected dividend yield is $0.00 and this assumption will be continued in future calculations unless the Company changes its dividend policy.
(v)	Expected Probability of a Fundamental Transaction. The possibility of the occurrence of a Fundamental Transaction triggering a Put right is extremely remote. As discussed above, a Put right would only arise if a Fundamental Transaction (1) is an all cash transaction; (2) results in the Company going private; or (3) is a transaction involving a person or entity not traded on a national securities exchange. The Company believes such an occurrence is highly unlikely because:

a.	The Company only has one product that is FDA approved but which will not be available for commercial sales for 18 months at the earliest;
b.	The Company flagship product is approved only in Argentina for Severely Debilitated Chronic Fatigue Syndrome patients;
c.	The Company may have to perform additional clinical trials for FDA approval of its flagship product;
d.	Industry and global market conditions continue to include uncertainty, adding risk to any transaction;
e.	Available capital for a potential buyer in a cash transaction continues to be limited;
f.	The nature of a life science company is heavily dependent on future funding and high costs, including research & development;
g.	The Company has minimal revenues streams which are insufficient to meet the funding needs for the cost of operations or construction at their manufacturing facility; and
h.	The Company’s Rights Agreement and Executive Agreements make it less attractive to a potential buyer.

(vi)	Expected Timing of Announcement of a Fundamental Transaction. As the Company has no specific expectation of a Fundamental Transaction, for reasons stated above, the Company used a discrete uniform probability distribution over the Expected Holding Period to model the potential announcement of a Fundamental Transaction occurring during the Expected Holding Period.
(vii)	Expected 100 Day Volatility at Announcement of a Fundamental Transaction. An estimate of future volatility is necessary as there is no mechanism for directly measuring future stock price movements. Daily observations of the Company’s historical stock values for the 100 days immediately prior to the Warrants’ grant dates, with a floor of 100%, were utilized as a proxy for the future volatility.
(viii)	Expected Risk-Free Interest Rate at Announcement of a Fundamental Transaction. The Company utilized a risk-free interest rate corresponding to the forward U.S. Treasury rate for the period equal to the time between the date forecast for the public announcement of a Fundamental Transaction and the Warrant expiration date for each simulation.
(ix)	Expected Time Between Announcement and Consummation of a Fundamental Transaction. The expected time between the announcement and the consummation of a Fundamental Transaction is based on the Company’s experience with the due diligence process performed by acquirers and is estimated to be six months. The Monte Carlo Simulation approach incorporates this additional period to reflect the delay Warrant Holders would experience in receiving the proceeds of the Put.

●	Level 1 – Quoted prices are available in active markets for identical assets or liabilities at the reporting date. Generally, this includes certain U.S. and government agency debt and equity securities that are traded in an active market.
●	Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Generally, this includes debt and equity securities that are not traded in an active market.
●	Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. As of March 31, 2020, the Company has classified the warrants with cash settlement features and convertible debt as Level 3. Management evaluates a variety of inputs and then estimates fair value based on those inputs. As discussed above, the Company utilized the Monte Carlo Simulation Model in valuing these warrants.

	(in thousands)As of March 31, 2020
	Total		Level 1		Level 2		Level 3
Assets:
Mutual Fund	$	22	$	22	$	—	$	—
U. S. Treasury notes		2,294		2,294		—		—
U.S. Government mortgage backed securities		1,195		1,195		—		—
Marketable Securities	$	3,511	$	3,511	$	—	$	—
Liabilities:
Redeemable warrants	$	239	$	—	$	—	$	239

	(in thousands) As of December 31, 2019
	Total		Level 1		Level 2		Level 3
Assets:
Mutual Fund	$	7,308	$	7,308	$	—	$	—
Liabilities:
Redeemable warrants	$	57	$	—	$	—	$	57

Redeemable warrants:
Balance at December 31, 2019	$	57
Fair value adjustment		182
Balance at March 31, 2020	$	239

	(in thousands)
2020		314
2021		426
2022		437
2023		449
2024		463
Thereafter		1,566
Total of payments		3,655
Less deferred issuance costs		(212	)
Less discount on debt instrument		(910	)
Less imputed interest		(266	)
Total balance		2,267
Less current portion		(217	)
Long term portion	$	2,050

Year Ending March 31,
2020	$	37,847
2021		43,035
2022		30,980
2023		33,637
2024		9,034
Thereafter		—
Less imputed interest		(14,048	)
Total	$	140,485

	●	an increase in interest and finance costs of $77,000 related to long term debt;
	●	a loss of $136,000 from the quarterly reevaluation of certain redeemable warrants in 2020, offset by

10.1	Amendment to 2017 Material Transfer and Research Agreement with Roswell Park Cancer Institute.(1)

10.2	April 1, 2020 Material Transfer and Research Agreement with Shenzhen Smoore Technology Limited.(2)

10.3	April 21, 2020 Mutual Confidentiality Agreement with UMN Pharma Inc., National Institute of Infectious Diseases, and Shionogi & Co., Ltd.(3)

31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Executive Officer.*

31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Financial Officer.*

32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Executive Officer.*

32.2	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Financial Officer.*

101.INS		XBRL Instance Document * **
101.SCH		XBRL Taxonomy Extension Schema Document * **
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document * **
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document * **
101.LAB		XBRL Taxonomy Extension Label Linkbase Document * **
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document * **

(1)	Filed with the Securities and Exchange Commission as an exhibit to the Company’s Current Report on Form 8-K filed March 26, 2020 and is hereby incorporated by reference.

(2)	Filed with the Securities and Exchange Commission as an exhibit to the Company’s Current Report on Form 8-K filed April 6, 2020 and is hereby incorporated by reference.

(3)	Filed with the Securities and Exchange Commission as an exhibit to the Company’s Current Report on Form 8-K filed April 27, 2020 and is hereby incorporated by reference.

	AIM IMMUNOTECH INC.

	/s/ Thomas K. Equels
	Thomas K. Equels, Esq.
	Chief Executive Officer & President

	/s/ Ellen M. Lintal
	Ellen M. Lintal
	Chief Financial Officer

Date: May 14, 2020

1.	I have reviewed this quarterly report on Form 10-Q/A of AIM ImmunoTech Inc. (the “Registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.	The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.